Cash Flow – Personal Finance Blog – Money Advice

One of my favorite & most successful clients built his investment base with dividend paying stocks. They were 80% of his portfolio and the other 20% he was aggressive, buying momentum stocks on margin! Even the most boring and bland portfolios need a little fun! His goal was to build a portfolio that threw off $8,000 a month in dividends when he left the corporate world-of course he was successful! To that point, it’s easy to forget what happens when you have a stock and reinvest the dividends so I will recap an article titled “My Smartest Investment.”

” I bought 100 shares of South Carolina Gas & Electric 25 years ago for $1,700 and reinvested the dividends. Today I have more than 1,400 shares worth $60,000. The dividends are paying about $2,000 a year-pretty cool! My client followed a strategy similar to this and I can tell you it works very well. Have a great day!

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2 Responses to “Cash Flow & Growth!”

Thats what drip investing is all about. A drip is a dividend reinvestment plan. The idea is to buy dividend paying stocks, and at the same time have the dividend provide even more stock. When it is retirement time, the person can take those dividends in cash instead of more stock for income. Then the investor can live off the income. Not only does the investor get apprciation of the stock over time, but they get padded with a dividend yield every year.